The motley is significant because it demonstrates that Fortunato was impaired.
Montresor wants to get revenge against Fortunato for some imagined grievance. He plans out the trap very carefully. Part of the plan is to catch Fortunato during Carnival. Carnival is a holiday where people let loose and celebrate after the Catholic ritual of Lent. The whole city is celebrating.
The reason Carnival was the perfect time for Montresor to target Fortunato is that his guard would be down. Carnival is a big party. By the time Montresor found him, Fortunato was dressed in a costume and very drunk.
He accosted me with excessive warmth, for he had been drinking much. The man wore motley. He had on a tight-fitting parti-striped dress, and his head was surmounted by the conical cap and bells. I was so pleased to see him that I thought I should never have done wringing his hand.
Montresor describes the “supreme madness of the carnival season.” Fortunato will not be suspicious because he is having a good time and doesn’t expect anything bad to happen. He also is not sober enough to notice that something is wrong.
There is a great irony to the clown suit. Fortunato is attending a celebrating and having the time of his life. He is dressed to enjoy himself. Instead, he is going to his death. Montresor clearly has no pity for him. He just wants to do whatever he can to get him down into the catacombs so he can kill him.
When you are enjoying yourself, you often have good feelings about those you meet. Of course, the alcohol had something to do with it. Fortunato finds Montresor's company pleasant, because Montresor pretends to care about him. He even makes a reference to the Masons, which Montresor does not understand and turns into a joke.